Sector's 'dismay' at two-year-old funding freeze

Education and childcare minister Elizabeth Truss has confirmed that local authorities will share a £755m fund to provide early learning places for 40 per cent of two-year-olds from September 2014-15.

The Department for Education has maintained the current funding level at a national average hourly rate of £5.09 per child per hour, which the minister says in her letter to local authorities ‘compares favourably to the Daycare Trust (now Family and Childcare Trust) cost survey’, which put the average hourly rate at £4.26 for children aged two and over.

However, Anand Shukla, chief executive of the Family and Childcare Trust said it was ‘misleading’ of the Government to cite the charity’s figures because it was more expensive to provide early education for disadvantaged children than ‘typical daycare’, which is what the survey figures are based on. Parents of eligible two-year-olds are also less likely to pay for more hours, which means the hourly cost is higher. The two-year-old offer is also funded for 38 weeks of the year rather than a typical daycare place offered all year round.

He said he had raised concerns when the DfE used the same survey figure last year to announce the initial funding.

‘There is no doubt that local authorities and providers require more than current funding levels to deliver a high quality two-year-old offer,' he said. 'For example, through our work directly with providers we know that more than £8 per hour is required in London in order to provide the offer on a sustainable basis.

‘The two year old offer has the potential to boost the life chances of the most deprived children in England. But a shortfall in day-to-day funding for providers and local authorities risks compromising this ambitious policy. Some extra funding would get the buy-in of providers and the essential local authority infrastructure needed to make this scheme a success.’

From next year the criteria for free places will be widened to reach 285,000 two-year-olds including around 8,000 looked-after and adopted children, and children with special educational needs and disabilities.

Ms Truss also urges local authorities ‘to pass all available funding to providers. This will create a sustainable high quality early years offer.’

Meanwhile, sector organisations have consistently argued that the funding is inadequate for many early years providers and that they are effectively subsidising the free places.

The Pre-School Learning Alliance said it was ‘extremely disappointed’ that there would be no rise to the current rate, despite annual inflation of around 3 per cent and the fact that providers have repeatedly stated that this figure does not reflect the real cost of delivering the places.

'Quality provision is not cheap'

Chief executive Neil Leitch said, ‘Alliance members are already facing enormous challenges. Many indicate that they are subsidising year-on-year increases in costs to enable them to continue to deliver the right kind of individual and specialist support to children in their care – particularly those with more complex needs.

‘Quality provision simply cannot be provided on the cheap. It is unfair – and frankly, unfeasible – to expect providers to continue to absorb the additional costs associated with delivering quality care. If the Government continues to provide an inadequate level of funding for this scheme, it is inevitable that we will continue to see a decline in the overall quality of early years provision in the long term.’

The National Day Nurseries Association said that surveys with its members showed that around half of providers did not receive sufficient funding to cover the cost of offering the two-year-old places.

Chief executive Purnima Tanuku said, ‘In order for the system to be sustainable and provide quality early education and care, funding must meet costs.’

She also urged local authorities to ensure that the funding was passed on in full to early years providers to ensure there were enough high-quality places.

‘Thanks to a more transparent system announced along with this funding, local authorities and childcare providers will be able to see how many two-year-olds in their catchment area are eligible for funded places.

‘Ministers have recently been urging local authorities to pass on the free place funding in full and we would ask them to take notice and listen.’

Liz Bayram, chief executive at the Professional Association of Childcare and Early Years (PACEY), said, ‘It is very encouraging to see Government promoting the important role good and outstanding childminders can play in delivering the free entitlement. We hope this national focus will encourage more local authorities to promote childminding to parents of qualifying children, because it is flexible and ensures the high personalised care that these very young children deserve.’

‘We know most good or outstanding childminders are still not part of local authority plans to deliver this important initiative. PACEY will continue to encourage childminders to talk to their local authorities about how they can be involved - but local authorities also need effective working partnerships with local providers, including childminders, to ensure children get the support that best meets their needs.’

Two-year-olds in schools

The Government also wants local authorities to support school nurseries to offer education and childcare from 8am to 6pm, to offer parents ‘blocks of hours’, rather than just morning or afternoon.

The Alliance also raised concerns about the drive to get two-year-olds into schools.

Mr Leitch said, ‘The Government must remember that the needs of two-year-olds are very different to the needs of three- and four- year-olds, especially those participating in the scheme who may have additional needs.

‘While pushing two-year-olds into schools may be a very convenient solution to the problem of finding enough places to fulfil the offer, the vast majority of the sector agree that this is simply not an appropriate environment for our youngest and most vulnerable children.

‘Decisions need to be based on reality, not inaccurate assumptions. We would therefore urge the Government to start engaging properly with the sector in order to gain a better understanding of the practical implications of the two-year-old offer, the needs of the children that it is intended to support and, crucially, how providers can be best supported to deliver it.’

Anne Longfield chief executive of 4Children, said, ‘The extension of early learning to 40 per cent of the country’s most disadvantaged two year olds has potential to improve the life chances of millions of children in years to come. That’s why it is imperative that a proactive approach is now taken to ensure that the required childcare infrastructure is in place so that all eligible children can reap the enormous benefits.’